India Steel Industry Report - 2014

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India Steel Industry Report - 2014

This report profiles India’s steel industry, discussing market trends and outlook into 2014 and beyond. The report also highlights key leading players in the sector including Steel Authority of India Ltd (SAIL), JSW Steel Limited (JSW) and Tata Steel Limited (Tata Steel).

India’s steel industry saw a demand slowdown in FY14 continuing on the trend witnessed in FY13. The slowdown in Chinese steel demand created a problem of oversupply globally, which caused a decline in the global steel prices. The differential in domestic and global prices triggered an increase in imports; negatively affecting the domestic producers and bringing even the domestic prices down. However, import duty imposed by the government led to a substantial fall in steel imports.

Among some other issues that hurt the domestic steel producers in FY14 were decreasing profitability, excess supply, rising inventories, increased finance costs, foreign exchange losses and a ban on iron ore mining. Steel consumption in the country was subdued even in the first four months of FY15.

Rising imports, difficulty in resource mobilization and global slowdown in steel demand have emerged as the major threats for this sector. However, the outlook for Indian steel industry is stable in the medium term owing to a low per capita steel consumption and a largely untapped rural market.

Key Points:

• During the last decade, India’s steel industry went through a period of steady growth backed by development in sectors like construction, real-estate, automobile etc. Total finished steel production grew at a CAGR of 9.4% during 2004-14.

• Steel Authority of India Limited (SAIL), Tata Steel, Jindal South West Steel (JSW), Rashtriya Ispat Nigam Limited (RINL), Essar Steel, and Jindal Steel & Power Limited (JSPL) were the six leading players in the Indian steel sector as of FY14. Together, these six players accounted for around 55% of the country’s crude steel production.

• Total crude steel production capacity grew at a CAGR of around 8.5% during the last five years.

• The industry is going through a demand slowdown, marked by a deceleration in finished steel consumption growth during the last few years. In FY13, the consumption grew by 3.3%, while in FY14 it grew by only 0.8%.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Steel production capacity
2.3 Steel production
2.4 Steel demand
2.5 Steel exports
2.6 Steel imports
2.7 Steel prices
2.8 Raw materials
2.9 Pig iron
2.10 Sponge iron
2.11 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading players
3.1.1 Steel Authority of India Ltd (SAIL)
3.1.2 JSW Steel Limited (JSW)
3.1.3 Tata Steel Limited (Tata Steel)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: Key financial ratios of the leading players

Chart 1: Annual finished steel production in India
Chart 2: World crude steel production (2013)
Chart 3: Per capita steel consumption by country in 2013
Chart 4: Gross sales from integrated steel plants in India (in INR bn)
Chart 5: Excise revenues collected from the integrated steel plants
Chart 6: Excise revenues collected from the integrated steel plants
Chart 7: Results of Indian general elections 2014-Seat share
Chart 8: Current account deficit and fiscal deficit
Chart 9: Per capita steel consumption in India (in kg)
Chart 10: Process used in Indian steel production
Chart 11: Quarterly GDP growth rate-India (y/y change in %)
Chart 12: Average monthly USD to INR exchange rate
Chart 13: Monthly inflation-India (in %)
Chart 14: Repo rate (Benchmark interest rate in %)
Chart 15: GDP by sectors at factor prices (FY14)
Chart 16: Percentage change over previous year- GDP by Sector
Chart 17: Contribution of eight core industries in IIP by weights (FY13)
Chart 18: Y/Y change in Index of industrial production
Chart 19: Steel production capacity in India (in MTPA)
Chart 20: Planned capacity expansion by 2020 in different states (in MT)
Chart 21: Annual crude steel production in the country (in MT)
Chart 22: Capacity utilization of steel plants (in %)
Chart 23: Breakup of crude steel production by companies (FY14)
Chart 24: Y/Y change in crude steel production of major companies-FY14 (in %)
Chart 25: Real consumption of total finished steel in India (in million tonnes (MT))
Chart 26: Y/Y change in annual production surplus of finished steel in India (in MT)
Chart 27: Annual steel exports of finished steel from India (in MT)
Chart 28: Net exports of finished steel from India (in MT)
Chart 29: Annual steel imports of finished steel in India (in MT)
Chart 30: Estimated excess supply of finished steel in Indian market (in MT)
Chart 31: Price of steel hot and rolled coil (in USD/tonne)
Chart 32: Domestic price index of steel products in India (2004-05=100)
Chart 33: Iron ore exports from India (in MT)
Chart 34: Production of pig iron in India (MT)
Chart 35: Production of sponge iron in India (MT)
Chart 36: Forecast for consumption of finished steel in India (MT)
Chart 37: Annual crude steel production by SAIL (in MT)
Chart 38: Net sales of SAIL-Annual (in INR bn)
Chart 39: Profit margins of SAIL
Chart 40: Annual steel production by JSW (in MT)
Chart 41: Net sales of JSW-Annual (in INR bn)
Chart 42: Profit margins of JSW
Chart 43: Annual crude steel production by Tata Steel (in MT)
Chart 44: Turnover of Tata Steel-Annual (in INR bn)
Chart 45: Profit margins of Tata Steel

Number of pages: 34
Release Date: Tue, 30 Sep 2014